Buying, selling and letting - September, 2006

All over the country, parents are anxiously studying the small ads in the hope of finding a suitable flat for their student sons and daughters. While flying the nest is a big adventure for school-leavers, funding their new lifestyle can be an expensive problem for the folks back home.

The cost of living for students is high, but cutting corners by opting for the cheapest accommodation can be both costly and dangerous.

“Although the market can be quite tight in university towns, parents and students should shop around to find a flat that offers a safe environment as well as value for money,” says Mairi Scott, managing director of risk consultants Leaseguard who offer specialist insurance for tenants and landlords in the rental sector.

“Sadly, in the worst cases, we have even seen young people die because of very poor safety standards in their student flat. Others have had money or items like mobile phones or iPods stolen, we’re also seeing an increase in cases of identity theft where flatmates or other people using the property have impersonated the victim to ‘borrow’ money from banks.”

Before signing a lease, she recommends some simple steps to check whether a landlord is complying with the law and with good practice.

If the flat is designed to accommodate more than two students, ask the landlord whether he or she has permission for its use as a Home of Multiple Occupancy (HMO). Rules have been tightened up on HMOs across the UK, and if the landlord doesn’t have the right licence, tenants could be chucked out when the local council gets to hear that the landlord is in breach of the rules.

“If your son or daughter is studying in Scotland, check whether the landlord has registered with the local council under the Scottish Executive’s compulsory Landlord Registration Scheme. This new law aims to ensure that landlords are ‘fit and proper’ persons and that their properties are both safe and of a reasonable quality,” says Mairi Scott.

It is also important to satisfy yourself that gas appliances are inspected annually by a Corgi-registered plumber – and that all portable electrical appliances are checked by an electrician. Professional landlords will have records to prove that they meet these legal requirements. Landlords are also obliged to ensure that all furnishings are fire resistant.

Read the lease carefully, paying particular attention to:

·    The rent – is it the same as the one quoted on the telephone?
·    The payment date.
·    The period of the lease.
·    The deposit required (normally equivalent to one month’s rent in advance).

To ensure a record of your rental payments, it is best to pay by standing order or cheque. If paying by cash, ask for receipts. You should receive, and sign for, an inventory of all furniture, appliances, equipment and other items in the flat. If one is not provided, draw up your own and ask the landlord to sign it.

“Bear in mind that many landlords may expect someone to act as a guarantor if rent for the period of tenancy is not paid up-front, which will mean that the person may have to undergo a credit check and have employer references taken up,” says Mairi Scott. “Guarantors should make sure they are aware of their responsibilities, such as paying any outstanding rent, and if the property is shared that they are joint and severally liable for all those named on the lease”.

When your tenancy is over, have your mail redirected to your new address. Uncollected mail is often used as a means of identity theft.

“Parents should check whether their own contents insurance covers their children while living away from home. If not, it’s important to insure your children’s possessions – but make sure you don’t under-insure. Lap-tops, DVD players, game consoles, MP3 players, phones, clothes, bikes and books are costly to replace,” says Mairi Scott.
 
She lists the things to look out for in a tenant’s insurance policy:

·    Is accidental damage included as standard?
·    Is tenant’s liability covered?
·    Is there a low excess (e.g., £100)?
·    Does the policy treat students as a standard risk? Some policies load the premium for students.
·    Is the replacement of locks covered following loss of keys?
·    Does it cover personal money and credit cards?
·    Is there an option to include personal effects away from the premises?

www.leaseguard.co.uk

For further information, contact: Chris Knight, General Manager, Leaseguard Ltd

Direct Tel no. 01698 368899
Mobile:    07980 626504
E-mail:        cknight@leaseguard.co.uk#

Market sees more first-time buyers

The UK housing market saw more participation by first-time buyers in August, according to the monthly survey from the National Association of Estate Agents (NAEA). The report shows a confident housing market, with estate agents reporting a significant increase in sales, housing stock and the number of buyers registered.
There has been a steady month-on-month rise in first-time purchases, and the number of first-timers is up dramatically from August last year.
Sales have risen by 36 per cent compared to last August’s figures, while last month the number of sales per agent was up seven per cent. The housing market, says the report, has proved itself resistant to the quarter per cent interest rate rise by the Bank of England at the beginning of August. However, NAEA branch chairmen across the UK warn that further rises will significantly impact the current upward trend.

Mortgage lending hits new highs

Gross mortgage lending hit a new record in August, reaching £32.7 billion, according to the latest data from the Council of Mortgage Lenders (CML). This represents a rise of 7.2 per cent on July’s figure of £30 billion, and is 21 per cent higher than in the same month last year. It also beats the previous record set in June, of £32.4 billion.
Commenting on the data, CML director general Michael Coogan said: ‘Record lending in August reflects the rise in mortgage approvals during the early summer combined with increasing house prices. The strength of the London market is also a factor, with property values and mortgage sizes substantially higher than in other parts of the country.
‘In the coming months we expect to see a very similar picture, as demand remains strong and house prices continue to rise. But with financial markets still expecting an increase in interest rates sometime between now and the middle of next year, we forecast that house price growth and strength of demand will moderate, as consumers anticipate higher rates.
‘Despite [August’s] figure being the tenth monthly lending record of the past year, this level of lending is sustainable and illustrates the market is in fundamentally robust shape.’

Housing supply and affordability worsening

Over a third of working households under 40 cannot now afford to buy a home, according to a new report from the New Policy Institute (NPI) for the Joseph Rowntree Foundation (JRF). The situation is worst in the South of England, where the figure is one-half.
The foundation, a leading policy research and development charity, finds that the number of new affordable homes is well below the UK’s need and that the situation has worsened since the mid-1990s.
Court orders for repossessions have doubled since 2003, and mortgage costs for first-time buyers have climbed back to their 1990 peak.
In more encouraging news, the report finds that the quality of housing has been steadily and substantially improving.
Co-author Guy Palmer says, ‘Our analysis points to worrying prospects for those on middle incomes and below. The most pressing policy challenges concern increasing affordability for first-time buyers and ensuring housing is available for those on low incomes.’
Philip Davies, chief executive of Linden Homes, comments: ‘The Foundation’s report confirms the seriousness of the affordability crisis facing first-time buyers today, many of whom have little chance of buying their own home, which was considered in many ways a right of passage for previous generations.
‘Linden Homes is constantly finding ways of making property more affordable for first time buyers,’ says Davies, pointing to a soon-to-be-launched scheme in which Linden sells homes at 25 per cent below market value and the buyer must pass on the discount when they sell. ‘This is a new way of letting people take ownership of a new home at a price they can afford.’

With the nights drawing in, this is the season to make sure that your home’s security is adequate. Tony Pell, product manager at JELD-WEN, looks at the benefits of choosing Secured by Design Licensed products when changing doors and windows in the home.

Government figures show that there are around 756,000 burglaries each year [Source: 2004/2005 British Crime Survey] which means that around one in twenty-five households experience some form of crime every 12 months. Research shows that if it takes longer than four or five minutes to break into a home, most burglars will be deterred from even trying. Simple features such as thief resistant locks, night latches and sturdy door frames can make all the difference   With many insurance companies also giving discounts for features that improve the safety of the home it now also makes financial sense to consider the security features of a product before buying.

Even though most break-ins take place in December and January when the dark evenings provide ideal cover for the would-be burglar, now is the time to start planning to upgrade your doors and windows. Don’t be caught out and, like most people, leave it until you have been burgled before taking the necessary steps. In a recent survey most people said they feared losing personal items, such as family heirlooms, jewellery and gifts more than items of higher financial value.  These cannot be replaced and so it is essential that when it comes to protecting your home and possessions prevention really is the answer.

Here are 10 ways to reduce the risk of a forced entry into your house:

1.  Fit Secured by Design products

Secured by Design is an initiative introduced by the Association of Chief Police Officers (ACPO), which aims to design out crime in housing by the use of effective crime prevention and security standards. The scheme, supported by a very informative website www.securedbydesign.com aims to assist the buyer in making informed choices on products which are more likely to resist common forms of attack and therefore give better protection. The website also gives links to companies that hold Secured by Design Licences and offer one or more products which meet technical standards endorsed by the scheme. The Secured by Design logo and the title "Police Preferred Specification" can only be used on products that meet these standards and so it is worth the time and effort visiting the site to identify them.


2.  Specify a PAS 23/24 doorset

Secured by Design covers not only locks, hinges, handles, but also complete doorsets. For even better security and if you are changing your door and frame you could choose a product that complies with PAS 23/24. This is the British Standard for enhanced door security and meets the Secured by Design requirements. Doors are also put through a wider range of tests including frame and glass security performance, as well as general durability in use requirements.  To carry out these tests the door has to be fitted into a frame along with all the ironmongery (a doorset) so as to recreate the actual installation as it would be fitted in your home. To comply with the PAS 23/24 the doorset is then subjected to rigorous tests including soft and hard body impact to represent a burglar trying to force their way in. Only when the doorset can be proven to withstand these sorts of assaults can it comply with PAS 23/24. All your fitter needs to do then is to ensure that the frame is securely fixed into the masonry.  JELD-WEN, the UK’s largest manufacturer of windows and doors has a range of Secured by Design compliant products to choose from.  For more information visit the website www.jeld-wen.co.uk.

3.  Choose a door made of a material that can withstand forced entry

If you are changing your door and not the frame then try to choose a replacement made from a material and design that is robust enough to withstand a burglar shoulder slamming the door or hitting it with a hard object. Composite entrance doors are particularly good at withstanding these types of forces.  Most composite doors are produced in a thermoset manufacturing process which creates a very effective barrier to forced entry. The robustness of the door is increased further by the high impact-resistant fibreglass skins. Overall door thickness is 45mm which is the minimum for increased security. Most composite doors when fitted with appropriate ironmongery meet the Secured by Design requirements. However you need to bear in mind that the composite door will only be as strong as the frame it is fitted in.  If your frame is weak, insecurely fitted or rotting then you should consider replacing it as well as the door (see PAS 23/24 above).

4.  Fit a light above your doors 

Fitting a movement sensitive light above your doors will ensure that any activity in front of the door or unwelcome visitors are immediately noticeable. Most burglars attempt to break-in during the dark winter afternoons when their antics can go unnoticed. A light could make all the difference in deterring them from even trying.

5.  Choose windows with enhanced security

Fit a security enhanced window that complies with the requirements of Secured by Design. All windows supplied to SBD standards comply with the requirements of BS7950: 1997 for security performance. Features offered on these windows include shoot bolt espagnolette locking that allows you to secure the window in several positions, as well as allowing ventilation. Factory glazing also comes as standard, which means glass is fitted in a controlled environment to meet SBD standards. The Secured by Design website also offers useful information when deciding where to purchase your windows.

6.  Cut back shrubbery

Would be burglars love nothing better than overgrown shrubbery to conceal their activities. On a rear window or door under the cover of Leylandii, trees or other foliage, the burglar can give themselves those extra minutes of seclusion to work on a forced entry. If they are exposed and visible to the neighbours they will not risk taking as long to enter the property.

7.  Fit a burglar alarm

Fit Magnetic Door Contacts to your doors and windows to detect when they are opened. Make sure you pay particular attention to the front door, back door and patios as these are the most likely to be targeted. It’s an unfortunate fact that around a third of us wait until we have been burgled before fitting an alarm.  Reduce your risks now with a burglar alarm and you won’t need to suffer unnecessary losses and disruption.

8.  Get a dog

Not as strange as you might think! Most burglars would avoid a house that has a dog – ask any postman what effective guards they make! Most burglars would be deterred by the barking which has the potential to raise a neighbour’s interest. If you really want to have a burglar alarm that is part of the family then the RSPCA ‘Adopt a Puppy’ campaign could be just what you are looking for – visit the website www.rspca.org.uk.


9.  Hide your valuables

We don’t mean hiding your money under the mattress, or a favourite piece of jewellery in your bottom drawer, as most burglars know the common places to look. Burglars are looking for easy pickings and sometimes just making sure that your valuables, DVD’s and car keys are not visible from an outside window is enough to make sure you don’t over encourage any would be break-ins

10.  Don’t leave a key under the mat

We’ve all done it - left a key under the mat when you haven’t time to wait for your partner to get home from work. Unfortunately burglars are wise to this and know where to look for the key. So if you think you have a novel way of hiding the key where burglars won’t look think again. They know all the places: plant pots, drainpipe, even under your favourite gnome in the garden!

So there you have it. Taking those extra measures to ensure a burglar thinks twice before breaking into your property is time well spent. Research shows that burglars are fickle. They rarely have ill feeling towards the houses or their owners, they just look for the easiest targets. They are however creatures of habit when it comes to evaluating a potential. Visual checks for secluded areas, scanning around for unlocked windows and sourcing quick get-away routes become habitual practice for them.

This opportunistic approach can be thwarted just by taking the few simple measures listed above. If a home looks easy to break into, the chances are they will give it a go; if it appears a challenge they will move on. It only takes a couple of seconds for them to make up your mind, so spending extra time incorporating features that deter would-be burglars is definitely time well spent!

To find your nearest stockist of Secured by Design Doors, contact JELD-WEN on 0870 126 0000 or visit the website. www.jeld-wen.co.uk.

 A survey conducted by Mortgages for Business, one of the UK’s leading independent buy to let mortgage brokers, amongst a panel of experienced buy to let landlords has found deep confusion surrounding recent changes in law relating to the property investment market.

 The survey conducted at a seminar attended by 75 buy to let landlords from across London and the South East asked landlords for their views on the recent legislation relating to Houses of Multiple Occupation and the Local Housing Allowance.

 Local Housing Allowance

The Local Housing Allowance is currently being trialled in eighteen areas in the UK before its nationwide rollout in 2008. This new approach to paying rent will see housing benefits paid into tenants’ bank accounts rather than paid directly to landlords.  The move is intended to give tenants greater control over their finances although there are fears that this will lead to greater rental arrears and subsequently tenants being evicted.

The Mortgages for Business survey included landlords with property in the pilot areas.  Over 25% of landlords surveyed said they would move out of this tenant market completely when the new rules come into force with a further 25% stating that they would be re-assessing their investment strategy.  Nearly 30% of respondents reported a lack of understanding of the impending change and are unsure of how they should act.  However, just one investor reports having withdrawn from this market to date.

Jonathan Moore, marketing director at Mortgages for Business, said: “This piece of legislation will fundamentally change the investment dynamics for those letting to DSS tenants. Many landlords have expressed concerns that this is essentially a backward step that will see the return of the ‘Dickensian landlord’ collecting rents every Friday afternoon”.

 Houses of High Multiple Occupancy (HMOs)

The survey also reports that landlords with HMOs in their portfolio have unanimously experienced difficulty at some point in the process of obtaining a licence from their local authority, either due to delays in processing paperwork or confusion over which properties qualify for a licence. Licences were introduced in April 2006.  Of particular concern to landlords is the way local authorities seemingly interpret the rules in different ways which leads to further confusion.

 A small number of landlords report finding themselves in a ‘catch 22’ situation, with lenders requiring evidence of a licence before releasing funds and landlords unwilling to pay for a licence without confirmation of funds to purchase the property.

 The survey found that of those landlords currently in the HMO market, six per cent had experienced difficulty in securing funding.  Nearly 70% of respondents experienced difficulty in interpreting the legislation and only one landlord from the survey reports having to change his tenancy agreements to avoid falling into the legislation criteria.

 “The dynamics of the buy to let market are changing with both lenders introducing tighter lending criteria and the government introducing new legislation to protect the seemingly vulnerable tenant.  Landlords at the sharp end of the social housing market see this legislation as ‘woolly and ill-thought through’, and is likely to stifle further investment in this particular market,” concludes Moore.

 

The basic concept of the offset or current account mortgage is straightforward. The borrower pays his or her monthly income into the mortgage account, which is augmented by any savings that they may have. The monthly mortgage payments are then deducted from the balance available in the account, up to a predetermined level.

Now, even the most uncertain borrower will have realised that this type of account isn't ideal for everyone. In fact, Bradford & Bingley's The Marketplace has calculated that in order to benefit from an offset mortgage of £100,000 you would have to have at least £30,000 worth of savings in the same account. So why would you go for an offset mortgage?
The offset advantage

Offset mortgages have been designed to 'breathe' with the borrower, being sufficiently flexible to enable borrowers to overpay in the good times and to relax a little when times are less prosperous. This means, in theory, that the mortgage will give borrowers some degree of flexibility so that they don't need to change products as regularly as the usual fixed-, capped- and discounted-rate brigade do.

One could argue that if the borrower is sold a suitable product in the first place, he or she should have no need to swap their mortgage every few years to keep up with the best deals in the market.

In some cases, however, borrowers can't even be sure that they have received proper advice from their brokers. In fact, the Financial Services Authority has warned that it will be getting tough on firms that have mis-sold badly designed lifetime mortgage products to vulnerable customers, so it follows that sales that have been made to meet ambitious targets will be scrutinised at the earliest opportunity by the new regime.

Because offsets are billed as a lifetime product, it is arguable as to whether they are being sold properly. As they reduce a broker's income stream, lenders tend to pay slightly higher procuration fees to compensate for the fact that borrowers will remortgage less often.
So, are some brokers just selling them for the quick fix of a large procuration fee? As an alternative, lenders could possibly look at offering brokers a loyalty bonus so they don’t recommend an alternative product to clients.
Going low

As a country, the UK still has a collective nose for the lowest possible interest rate. At this time of likely interest rate rises, therefore, there will be a natural tendency among borrowers to select fixed-rate products with some degree of flexibility built in. But most people are uncomfortable with the idea of putting all their financial eggs in one basket.

Many people would be happier with the notion of a flexible mortgage, where for example they could make overpayments, take payment holidays, use drawdown facilities and benefit from interest calculated on a daily basis.

In this regard, truly flexible products include the Woolwich OpenPlan, Intelligent Finance (IF) and The One Account. However, it is also correct to say that some other high street lenders offer products that incorporate an element of flexibility, so they are not true offsets but do feature many of their benefits.

Recent research by Datamonitor shows that in July 2001 eight per cent of borrowers were using an offset mortgage, but by July 2003 this figure had risen to 16 per cent. In
addition, forecasts suggest that in five years offset products will account for up to 20 per cent of the market, with total lending equating to some £44 billion.
So who's it for?
Where does all this leave the average borrower in search of the best product for his/her purposes? As you may already have guessed, the answer depends to a great degree on the circumstances of the particular individual.
Taking the example of the first-time buyer, we all know they are struggling to gain a foothold in today's property market so an offset mortgage would seem to be just the thing to help them take their first step.

Many offset mortgages work on the principle of affordability, rather than conventional income multiples. IF, for example, allows applicants to stretch up to four-and-a-half times their salary, dependent on affordability and credit score.
The problem is that a broker would probably not be giving the best advice if he or she recommended such a product to a first-time buyer. Most first-time buyers have no
substantial savings and usually want to reduce payments as much as possible in the early stages of the loan, which makes an offset mortgage less suitable than a more
conventional short-term discount- or fixed-rate product. As for the self-employed, their tax bill can be saved until the end of the financial year, acting as 'savings' until it has to be paid, thus reducing the interest paid.

How to improve the product
It is clear that offset mortgages can be a godsend to certain categories of borrower, but how can they be made more attractive to a wider audience? First, it is worth suggesting that a fixed-rate option within the offset would attract more borrowers.
With this option customers could experience a maximum monthly payment, but the offsetting facility would mean that this payment could be reduced while at the same time having a longer-term effect of capping the mortgage. Equally, offset mortgages featuring longer-term discounts could be offered, so that the monthly payments don't rise too sharply after the initial three- to six-month discounted incentive period.

Interest rates hold steady

Interest rates remained at 4.75 per cent today as The Bank of England’s monetary policy committee (MPC), a move that will no doubt come as a relief to home owners and prospective buyers after last month’s quarter-per cent rise.
With inflation still set to go way above its two per cent target, however, many experts predict at least one further rise this year.

House prices keep rising

The annual rate of house price inflation picked up for the third consecutive month in August, according to the latest market study by Nationwide Building Society. With prices rising by 0.8 per cent in August, the annual rate of growth accelerated to 6.6 per cent.
Fionnuala Earley, Nationwide's Group Economist, said, ‘House prices are now 6.6 per cent higher than at this time last year. This is the fastest annual rate of growth since April 2005 and almost three times faster than at this time last year. The underlying market remains fairly firm with prices increasing by 0.8 per cent in August.’
The average house price in the UK is now £167,721 - £10,412 higher than August 2005 and the equivalent of a rise of almost £30 per day.
The housing market is unlikely to slow as rapidly as in the last rate rise cycle, said Earley. ‘The rise in interest rates in August, together with the expectation of another rise before the end of the year, naturally leads to comparisons being drawn between now and the last cycle of interest rate rises. The five increases between November 2003 and August 2004 led to a rapid fall in house price inflation, from over 20 per cent in July 2004 to 2.3 per cent by the time rates were reduced again in August 2005. While we expect base rates to reach five per cent by the end of the year - above the peak of the last rising cycle - we do not expect the market to slow as sharply as before.’
The main reasons, said Earley, are: fewer interest rate rises are expected than happened in the last inflation cycle; fixed mortgage rates have moved more gradually; and demand, particularly from the investment sector, is likely to remain fairly supportive. ‘There is a stark difference in the tone of the MPC minutes’ between last month’s rate rise and those during the previous upward trend, she said.

Short-term fixed rate

Accord Mortgages has a fixed rate until 30 September 2008 at 4.89%; this reverts to the standard variable rate (SVR) for the remaining term, currently 6.5%. Overall cost for comparison is 6.6% APR. An early repayment charge applies to those who repay all or any part of the mortgage during the fixed-rate period. Valuation fee is £260; the £695 arrangement fee can be added to the loan.

Long-term fixed rate

Alliance & Leicester has a fixed-rate deal to 31 August 2011 at 5.19%, reverting to the SVR (currently 6.59%) for the remainder of the mortgage term. The overall cost for comparison is 6.4% APR. An early repayment charge will apply if all or any part of the loan is repaid during the fixed rate period of the loan. The valuation fee is £280; the £499 arrangement fee can be added to the loan.

Cashback

Chelsea Building Society is offering 6% cashback with its five-year fixed rate loan (rate 6.74, fixed until 30 November 2011).Overall cost for comparison is 7.1% APR. The cashback must be repaid if the loan is repaid within the fixed rate period. The product comes with free valuation; the arrangement fee of £545 can be added to the loan.

Short-term discount or tracker

BM Solutions has a two-year tracker scheme at the Bank of England base rate minus 0.25% (currently 4.50%), reverting to the SVR (currently 6.74%) for the remaining term of the mortgage. The overall cost for comparison is 6.7% APR. An early repayment charge applies if you repay all or part of the mortgage within two years. The valuation fee is £350; the £500 arrangement fee can be added to the loan.

Long-term discount or tracker

Northern Rock has a two-year tracker buy-to-let deal at Bank of England base rate plus 0.19 (equivalent 4.94%), reverting to the SVR (currently 6.7%) for the remainder of the term. The overall cost for comparison is 6.8% APR. An early repayment charge applies to those who repay all or any part of the mortgage during the first two years.  There is valuation fee of £350, as well as an arrangement fee of £1,500 that can be added to the loan.

Remortgage

The Bank of Scotland is offering a tracker at base rate plus 0.14% (current equivalent 4.84%) until 31 October 2008. The rate reverts to the SVR (currently 6.65%) for the remainder of the term. Overall cost for comparison is 6.6% APR. An early repayment charge applies if you repay all or part of the mortgage during the discount period. Free valuation and legal; no arrangement fee.

Buy-to-let

BM Solutions has a two-year tracker buy-to-let at the Bank of England base rate plus 0.19% (currently 4.94%), reverting to the SVR (currently 6.7%) at the end of the period. Overall cost for comparison is 6.8% APR. An early charge applies if you repay all or part of the loan within the first two years. There is a valuation fee of £350; the £1,500 arrangement fee can be added to the loan.

Lifetime tracker

Norwich & Peterborough has a lifetime tracker at base rate plus 0.35% (currently 5.1%) for the full term. Overall cost for comparison is 5.4% APR. There is no early repayment charge. Valuation fee is £220; the £599 arrangement fee can be added to the loan.

100% mortgage

Norwich & Peterborough has a three-year discounted deal at 1.1% off its SVR, (current equivalent 5.64%), reverting to the SVR (currently 6.7%) for the remaining term. Overall cost for comparison is 6.6% APR. An early repayment charge applies if you repay all or part of the loan during the discount period. Valuation fee is £220; no arrangement fee.

Chosen by mortgagetalk.co.uk

The neverending mortgage

Kent Reliance Building Society has introduced a home loan with no payback date. Dubbed the 'deathbed mortgage' this could help reduce payments by £150–£170 a month and will enable borrowers to take that crucial first step on to the property ladder.
Borrowers will be able to take out a 25-year interest-only loan, and after the end of the 25-year period, will simply be able to extend it for a further 25 years – the loan is 'portable' so when someone dies, it can be passed on to the next generation or paid off with the sale proceeds of the dead person's property.
Critics say that the loan will turn into a life sentence, with buyers paying a mortgage all the way through their retirement - and still leaving later generations to pick up the bill.

Buy-to-let boom

Buy-to-let investors have seen their rental yields rise recently, according to figures from the Royal Institution of Chartered Surveyors (RICS).
According to new figures released by RICS, rental prices for between May and July have risen more sharply than any other time over the last eight years, with a 30 per cent rise in rental levels. In the first quarter of 2006 the average rent was £778 per month.
Jeremy Leaf, an RICS spokesman who also owns his own London surveying business, has suggested that high immigration levels into the UK could be impacting on rent costs, as
increasing numbers of immigrants come to the UK from EU accession countries
looking for accommodation.
Speaking on BBC Two's Working Lunch about increasing rent prices, Leaf
observed: ‘Immigration influences the property market because a lot of the people who are working are here for short periods, and therefore not looking to buy. They want to rent and they'll do that for at least six months, maybe a year.’
While rising rental yields are good for owners of rental property, the picture is less rosy for students, who rely on renting, as well as first-time buyers, according to Leaf. ‘Because the lettings market has remained active, it's actually restricting the opportunities for first-time buyers in particular to save those deposits that they actually need to buy a property.
‘So, unusually, both parts of the market are quite strong.’
According to RICS, the average cost of renting a one-bedroom flat has risen from £569 per month in 2005 to £593 for 2006, while the rental on an average three-bedroom semi has risen from £877 per month last year to £932 at present.

Shortage of London houses widens price gap

An acute shortage of family houses and an increased confidence among top-end buyers has widened the price gap between houses and flats in London. Although flat prices have risen this year, they have not done so to the same degree as house prices.
Winkworth Notting Hill has recorded ‘phenomenal activity’ in the family house market, with cases of sales being agreed, often above asking price and within days of being marketed. The office has found that, while prices of flats have risen by around 15 per cent this year for a typical one bedroom apartment, house prices have risen by nearer 25 per cent. Alex Thompson of Winkworth Notting Hill says, 'Demand continues to dwarf supply, particularly in the family house market where confidence is highest. With buyers now prepared to exchange within 24 hours, an increasing disparity has emerged between house prices and flat prices.'

Zones challenge the traditional triangle

The new kitchen zones – Robert Entwistle, Design Director, Thomas & Thomas

When planning a kitchen, today’s designers no longer rely on the traditional ‘triangle model’ of fridge, cooker and sink which was key to the smaller ‘work’ kitchens – changing lifestyles, greater space and the advent of new fixtures, appliances and technology mean that we now work with clients to create intelligently designed living and working spaces that fit in with their individual lifestyle.

Often this means creating three distinct zones within a larger ‘triangle’ which are designed to work in harmony with each other and the people who use them.

The emergence of the extractor hood to remove cooking smells from the room and the island unit which is a wonderful practical addition to any kitchen creating a central hub to the room – and the increased use of the dishwasher means that today’s kitchens often have 3 working zones - a ‘cooking/ preparation’ zone, ‘washing up/crockery and utensil storage’ zone and a third ‘refrigeration and food storage’ zone, often centred around a large, American-style fridge freezer and larder cupboard.

It is now popular to have two sinks in the kitchen – one still traditionally sited next to the window for washing up and a second as a preparation sink, usually located in a central island unit which has become the focal cooking and preparation point in many kitchens.
                                                                                        
Most clients want their kitchen to work both as a place to prepare and cook food but also perform as an informal eating space –a place where the whole family, friends and relatives can hang out and eat. The traditional triangle design of kitchens was appropriate when kitchens were smaller and families ate in a separate dining room. However, formal dining rooms are losing favour – we see people knocking the two rooms through to create one large living, eating and cooking space or building an extension to allow them to introduce a dining area to their original kitchen.

Tradition and technology have combined to create kitchens which are much more family oriented than before. As all members of the family become increasingly busy and working parents struggle to spend quality time with their offspring, the kitchen has developed to allow parents the space to prepare, cook and eat while at the same time hang out with their kids and, when friends come round they are much more likely to gather in the kitchen, chat with their host and then sit down together for a meal in the living area of the room.

The kitchen is no longer just the heart of the home – it is the central hub of operations!

Those who are seeking the top investment location in the UK should head to Ipswich, according to a study by the Property Investor Show. As Suffolk continues to attract higher and higher prices, particularly in seaside locations, Ipswich, more inland but blessed with good retail and transport amenities as well as high-quality housing stock has emerged as the number one hotspot.
According to the study, Ipswich came top of the list of towns where average house prices were lower than the stamp duty of £125,000 but yet house price inflation is set to see significant future increases.

In Ipswich, the average price for a flat or maisonette is £121,700 - significantly lower than the £167,000 UK average.

The top ten list also featured Peterborough, Chatham and Middlesbrough – other locations in which house price rises outperformed other markets in the UK.
’With prices soaring over recent years, it is incredibly difficult for novice property investors to get started. However, there are many emerging areas that are still very affordable and benefit from extensive regeneration projects,’ said Nick Clark, managing director of the Property Investor Show.

’These present excellent investment prospects. The identified investment hotspots offer investors and first-time buyers the opportunity to buy homes at some of the lowest prices in England and Wales and are also set to see some of the highest price rises in the next few years.’